During an employee Webcast earlier this week to discuss Intel's stock options program, the chip giant's CEO, Paul Otellini, shed a little background on Sun Microsystems' pursuit to find a buyer.
When queried by an employee about his thoughts regarding an IBM-Sun merger and whether Cisco's recent announcement about entering the storage market drove Sun to find a buyer, Otellini said:
Oh, I don't know if the Cisco entry spurred IBM. I think (a) cheap Sun price--a low price--spurred a lot of interest. I can tell you that Sun was shopped around the valley and around the world in the last few months. A lot of companies got calls or visits on buying some or all the assets of the company. It looks like IBM is in the hunt now. And at a hundred and some odd percent premium, I suspect they'll get it.
I don't think it had anything to do with Cisco. I think IBM is trying to consolidate architectures. IBM has the strongest Java license in the industry. By picking up Sun--which is the creator of Java--they really consolidate their position not just in Linux, but also in Java.
I think the stuff on Solaris and SPARC is likely to see EOLs over time through the IBM acquisition. But no strategic reason for IBM to maintain that except to attempt to convert the very large Sun SPARC Solaris base to power. I think that would be their most likely strategy as part of this.
Is it good or bad for us? I don't know. I'd rather have Sun be independent, I guess.
Otellini's comments were published in a Securities and Exchange Commission filing on Wednesday.
Sun's shares closed down about 3 percent to $7.85 a share Wednesday during the regular trading session, while the broader markets advanced. With its closing price, Sun is valued at $5.85 billion.
IBM is reportedly interested in paying $6.5 billion to $8 billion, according to reports in The Wall Street Journal.